The Federal Reserve (almost) 100

As the Federal Reserve reaches its hundredth anniversary, understanding its achievements and failures serves as a useful guide to needed reforms. My paper is an invited comment on the analysis by Selgin, White, and Lastrapes who conclude that the Federal Reserve's performance is not an improvement on pre-Federal Reserve policy. I draw a slightly different conclusion. The only periods in which the Federal Reserve achieved relatively steady growth and low inflation are the two periods in which if acted as if guided by a rule. The years are 1923-1928 under a modified gold standard and 1985-2003 when it acted as if it followed a Taylor rule.